Relevance up to 14:00 2022-01-11 UTC+00
Following bitcoin, ethereum dropped to a swing low at $3,000. Onchain activity and open interest in the main altcoin are falling because of the fear that has paralyzed the market. However, the correction in the cryptocurrency market should be seen as a great opportunity to open long positions or buy crypto at a low price. Joey Krug, head of hedge fund Pantera Capital, is confident in this and predicts a great future for ethereum.
According to Krug, the main altcoin has great potential because of the value of blockchain.”If you roll the clock forward 10 to 20 years, a very sizable percent, maybe even north of 50%, of the world’s financial transactions in some way, shape or form will touch Ethereum,” Krug says. The prerequisites for this can be seen even now, thanks to the rapid growth of the DeFi and NFT markets.
The development of the decentralized finance industry has become a launching pad for large capital investments. The growing importance of ethereum is not news because more than 70% of the DeFi sector is tied to the coin’s blockchain. Cardano, solana and polkadot may become competitors to ETH, as they duplicate its functions. However, not a single altcoin has come close to ETH in the last two years, nor has it taken a significant piece of the market.
Ethereum developers are working on the altcoin’s scalability and high gas commission. These technical obstacles prevent it from growing even further. The ETH 2.0 update should fix these problems, increase network bandwidth and significantly expand the institutionalization of the cryptocurrency. Experts at JPMorgan and Bloomberg predict the growth of the decentralized finance market, and given the lack of real competitors to ETH, the value of the altcoin is likely to continue to grow.
Ethereum’s current state is the result of the correction and increased correlation with BTC. The cryptocurrency has great value, and for this reason, investors of the asset show no panic at all. Despite all the long-term positivity, the ETH/USD pair is trading near the key $3,000 support area on January 10. The asset showed a sharp downward momentum after breaking the triangle pattern. Technical indicators are showing bearish signals, which could mean a decline to deeper lows. The MACD continues its downward movement after forming a bearish crossover and the stochastic oscillator has left the bullish zone and is moving into the overbought territory. The RSI dropped below the 40 mark, indicating that bulls are weak and there are no prerequisites for recovery. ETH is likely to drop towards support at $2,600. The level of $2,400 may become a zone of high liquidity, and even if the asset declines to this area, the fall should be used to accumulate long positions. The bullish trend of ETH is still relevant, and the target for a new all-time high is located at $6,000.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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